The Other Kids on the Block: Commercial Providers Grow Up in the eLearning Space

In a market that has been dominated by two big players, WebCT and Blackboard, how will other commercial vendors gain market share and thrive? Syllabus interviewed key executives at two companies—Unicon and Desire 2 Learn—about how they plan to continue to be successful in this difficult and evolving market.

The market for learning management systems in higher education is changing. Open source environments—Sakai, OpenCMS, Plone, Moodel, Segue, and soon Harmoni—are not only alternatives to “black box” systems; they are points around which higher education may organize to influence market directions.

One notable project, the OpenKnowledgeInitiative (OKI) was funded in 2000 by the Mellon Foundation to provide a framework and proof of concept for an open source learning management system. More recently, Sakai, also funded by Mellon, has gone beyond that by promising a full-scale production open source learning management system by Summer 2005. Vendors wishing to compete in this marketplace must recognize the unique collaborative nature of higher education and the impact cooperative development efforts may have on their market strategies.

Unicon’s Strategy: Up with uPortal

Unicon CTO Kevin Gary comments that his company is taking a different approach by leading with a portal solution. Unicon’s Academus product suite provides a portal based on the open source uPortal software, with a learning management system built as a channel inside the portal and offered to customers as a value add-on charged at 20 percent of the portal price.

“It’s a risky proposition in some sense to build your entire product suite inside a portal and say that you can’t pick it up and run it as a normal Web application,” says Gary, referring to his company’s decision of two years ago. “But at the time uPortal was just on the rise, so it was a very interesting combination of factors for us to get involved with JA-SIG, to merge with Interactive Business Solutions (IBS), to provide a dashboard user interface, and see it all come together…we really think this has put us in a very unique position in that uPortal’s trajectory is still rising in this space.”

Perhaps the most intriguing part of Unicon’s model, with Academus built natively within uPortal, is that Unicon is one of the four Sakai commercial affiliates. And since Sakai is built on uPortal, Unicon is certainly well-positioned to participate in and benefit from common development efforts. “We’re excited to see ourselves in this space,” says Gary, “because I think the Sakai folks have realized that they need to take a collection of functionality—a collection of systems—and put that on top of a common platform and also a common user interface in terms of a portal.” Running with uPortal, Unicon seems to be carving out a niche role for the future.

As for the present state of the market, Gary observes that Unicon is picking up business from WebCT and Blackboard institutional users that are unable to buy the additional licenses they need and can’t afford to move up into a higher tier with their current vendor…as well as from faculty who aren’t happy with their LMS. “Frankly, we’ve had some success just from the dissatisfied customer base of WebCT and Blackboard—some from a price perspective and some from a functionality perspective,” says Gary. “We’ve gone into some institutions that are simply tired of the price gouging that’s going on with WebCT and Blackboard. There’s a certain part of the market that feels a little held captive.”

In terms of future development, Unicon is setting its sights on further integration and interoperability. Their plan is to migrate Academus up to the portlet standards that uPortal will soon provide to enable cross-portal integration. They are looking at other portal solutions that they could potentially integrate with—in order to open up further market potential. They’ve also selected features and functions to work on, based on market feedback. Single sign-on adapters is the highest on the list, along with data integration, XML content delivery, and assessment tools.

A notable example of their data integration effort will be Unicon’s 1.3 release of Academus, currently in beta, that is going to have an integration piece with Datatel, to input all the SIS information that Datatel stores in its Colleague product. Unicon can import the administrative data into Academus, as well as export certain data—like grades—to provide seamless integration with the SIS.

Unicon is an academically informed company, with many of the officers and staff coming from positions within Arizona State University, including founders John Blakley and Chris Franz. “We really enjoy being involved with higher education,” says Kevin Gary. “I think you have to have that passion or else you might not be in this market. In any market you might say that your customers have unique needs. But in higher education, you really mean it.”

“In any market you might say that your customers have unique needs. But in higher education,
you really mean it.”

Desire 2 Learn: “Just Listen”

John Baker, Desire 2 Learn’s CEO, says that his company’s most important strategy is to listen to customers. “For us to succeed, the biggest thing that we have to do as an organization is really just listen. We strive to work with our clients and focus on having the resources to respond to them.” Baker notes that the 7.4 release had more than 200 new feature enhancements, of which about 90 percent were driven by client requests.

Desire 2 Learn’s goal is to give the clients full control over their systems, defining the rules, structure, organizational units, look-and-feel, and branding. “As soon as we made the decision not to try to solve every problem with a single solution but instead create technology that can adapt, it’s made our life easier and the clients are much happier,” says Baker, who views this as a much different approach from some of the bigger competitors.

To avoid code modifications that can disappear during version upgrades, the company has tried to use forms and databases, allowing the customer to modify settings. Institutions can thereby define different fields and role structures to suit their particular needs. “We try to make that process very, very easy and eliminate as much of the administration as we can so that the instructional designers, faculty, and support staff can spend more time on the students,” says Baker.

Differentiation is increasingly important as institutions vie for enrollments. “Students are going to look to see what separates one institution from another,” Baker asserts. “Institutions are going to try to differentiate themselves. With Desire 2 Learn, you won’t see the same sort of cookie-cutter approach if you look across different institutions.” The same is true even within institutions—different departments or programs within a single institution can generate their own roles, fields, and so forth, as needed.

Desire 2 Learn has enjoyed tremendous growth, from the time its first platform debuted in 2000 with about 1,000 local users to estimates of about 1.8 million users in North America today. A well-publicized and significant jump along the way was the win of a rigorous vendor selection process at the University of Wisconsin system in Spring 2003, to bring up a single statewide platform with about 160,000 students. With that contract, the company was able to demonstrate that their technology could scale. Other statewide contracts have been added since.

Instead of market share, development and service are the priorities for Desire 2 Learn. “As we went through the rapid growth, instead of doing more marketing, we put all of the extra resources we had back into the organization for more R & D, service, and support,” explains Baker. The company spends 60 to 70 percent of its budget on R & D.

“But most importantly, we’re trying to establish ourselves as the clear leader when it comes to the best possible, technology, service, and support for our clients,” says Baker. “We entered this space to help our clients improve the quality of the education that they’re offering, while making sure that the time they are spending isn’t clicking buttons—it’s time for teaching and learning.”

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